Greenland Homes, Inc. v. E & S Marketing Resources, Inc. (In re Greenland Homes, Inc.)

227 B.R. 710, 1998 Bankr. LEXIS 1780
CourtUnited States Bankruptcy Court, S.D. Indiana
DecidedSeptember 16, 1998
DocketBankruptcy No. 97-10337-RLB-11; Adversary No. 97-438
StatusPublished

This text of 227 B.R. 710 (Greenland Homes, Inc. v. E & S Marketing Resources, Inc. (In re Greenland Homes, Inc.)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, S.D. Indiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Greenland Homes, Inc. v. E & S Marketing Resources, Inc. (In re Greenland Homes, Inc.), 227 B.R. 710, 1998 Bankr. LEXIS 1780 (Ind. 1998).

Opinion

FINDINGS OF FACT, CONCLUSIONS OF LAW, AND ENTRY ON COMPLAINT TO DETERMINE VALIDITY, PRIORITY AND EXTENT OF LIEN

ROBERT L. BAYT, Bankruptcy Judge.

This matter is before the Court on the Complaint to Determine Validity, Priority and Extent of Lien on Property, for Slander of Title, for Abuse of Process, and for Malicious Prosecution (“Complaint”), filed by Greenland Homes, Inc. (the “Debtor”) on October 21, 1997. E & S Marketing Resources, Inc. (the “Creditor”) filed an answer (“Answer”) to the Complaint on January 12, 1998. A trial on the Complaint was held on July 22, 1998. The Court, having considered the Complaint, the Answer, the matters presented at the July 22, 1998 trial, and the parties’ post-trial briefs, and pursuant to Federal Rule of Civil Procedure 52 and Bankruptcy Rule 7052, now makes its

[713]*713 Findings of Fact

1. The Debtor filed a petition under Chapter 11 on September 8, 1997. The Debtor is in the business of building houses for individuals, and has continued to conduct its business as a debtor in possession since the filing of the bankruptcy petition.

2. The Creditor is in the business of providing advertising services and materials to businesses such as the Debtor.

3. Several months prior to the Debtor’s bankruptcy filing, the Debtor and the Creditor entered into a contract (the “Contract”), pursuant to which the Creditor agreed to supply the Debtor with signs, camera art, site maps, displays and various other advertising materials (the “Advertising Work”). The materials were to be used by the Debtor to market the houses that the Debtor was building in five different subdivisions. The five subdivisions covered by the Contract are Indigo Lakes, located in Fishers; Oak Commons, located in Greenfield; McKenzie Place, located in Greenfield; Whittington Village, located in Brownsburg; and Waterford Crossing (also referred to by the parties as “Shannon Lakes”), located on the south side of Indianapolis.

4. The Creditor began the Advertising Work in April of 1997, and continued the work through August of 1997. To date, the Debtor has not paid the Creditor for any of the work done pursuant to the Contract.

5. On September 3, 1997, the Creditor filed a notice of intent to hold mechanic’s lien (“Notice of Intent”) with the Office of the Recorder of Marion County, Indiana. See Plaintiffs Exhibit “C”. The lots described in the Notice of Intent are five lots located in the Debtor’s Waterford Crossing subdivision (the “Five Waterford Lots”). The Notice of Intent asserts that the Creditor is owed a debt in the amount of $68,753.73 for the following work:

for work, labor and materials furnished by Claimant for improvements of said real estate within the last sixty (60) days, which improvements are more specifically described as follows: Signs, camera art, site maps, displays and various advertising items.

6. The labor and materials that the Creditor supplied to the Debtor in performing the Advertising Work, were furnished for general sales and marketing purposes. None of the work done by the Creditor, and none of the materials that were supplied to the Debt- or, were used in the construction of a house or building on any of the Five Waterford Lots. The Creditor did not perform any physical act of labor in connection with the construction of any house or building on any of the Five Waterford Lots.1

7. The $68,753.73 debt described in the Notice of Intent is for Advertising Work that the Creditor performed in relation to all five of the Debtor’s subdivisions.

8. Prior to the filing of the instant adversary proceeding, the parties engaged in negotiations regarding the release of the Creditor’s lien on the Five Waterford Lots. See Plaintiffs Exhibit A and Defendant’s Exhibit 2. To date, the Five Waterford Lots remain encumbered by the Creditor’s lien.

The Court, based on the foregoing Findings of Fact, now makes its

Conclusions of Law

1. The Court has jurisdiction to decide this matter. 28 U.S.C. Section 1334, 28 U.S.C. Section 157.

[714]*7142. In the Complaint, the Debtor makes several allegations concerning the mechanic’s lien (the “Mechanic’s Lien”) that resulted from the filing of the Creditor’s Notice of Intent. The Debtor alleges that the Mechanic’s Lien is not valid because the type of work that was performed by the Creditor is not covered by the Indiana mechanic’s lien statute, and because the Creditor is not within the categories of persons intended to be protected by the Indiana mechanic’s lien statute. The Debtor alleges that the Creditor’s Mechanic’s Lien is invalid, and that the filing of the Notice of Intent by the Creditor constituted slander of title, malicious prosecution, and abuse of process. The Creditor asserts that the work it performed was covered and protected by the Indiana mechanic’s lien statute, as the work added value to and made an improvement to the Debtor’s real estate. The Creditor cites Haimbaugh Landscaping, Inc. v. Jegen, 653 N.E.2d 95 (Ind.App.1995), in support of its argument.

3. At the July 22,1998 trial, after presentation of the Debtor’s case in chief, the Creditor moved to dismiss all four counts of the Debtor’s Complaint. The Court took the Creditor’s motion to dismiss under advisement, and ruled that the parties should go forward with the presentation of evidence. In its opinion today, the Court addresses the following issues raised by the Complaint, the Creditor’s response to the Complaint, and the Creditor’s motion to dismiss:

a) Did the Creditor perform work or furnish materials that resulted in an improvement to the Debtor’s real estate that is protected by the Indiana mechanic’s lien statute?
b) Is the Creditor within the categories of persons intended to be protected by the Indiana mechanic’s lien statute?
c) Was it correct to file a lien for the entire $68,753.73 debt owed, against the Five Waterford Lots?
d) Did the filing of the Notice of Intent by the Creditor, and subsequent refusal to release the Mechanic’s Lien, constitute slander of title, malicious prosecution, and abuse of process?

Did the Creditor Perform Work or Furnish Materials That Resulted in an Improvement to the Debtor’s Real Estate, that is Protected by the Indiana Mechanic’s Lien Statute

4.The Indiana mechanic’s lien statute (the “Mechanic’s Lien Statute”) is found at Indiana Code Section 32-8-3-1, and provides in relevant part as follows:

That contractors, subcontractors, mechanics, lessors leasing construction and other equipment and tools ... journeymen, laborers and all other persons performing labor or furnishing materials or machinery ... for the erection, altering, repairing or removing any house ... may have a hen separately or jointly upon the house...

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Related

Johnson v. Blankenship
688 N.E.2d 1250 (Indiana Supreme Court, 1997)
Cato v. David Excavating Co., Inc.
435 N.E.2d 597 (Indiana Court of Appeals, 1982)
Lee & Mayfield, Inc. v. Lykowski House Moving Engineers, Inc.
489 N.E.2d 603 (Indiana Court of Appeals, 1986)
DISPLAY FIXTURES CO., ETC. v. RL Hatcher, Inc.
438 N.E.2d 26 (Indiana Court of Appeals, 1982)
Haimbaugh Landscaping, Inc. v. Jegen
653 N.E.2d 95 (Indiana Court of Appeals, 1995)
Premier Investments v. Suites of America, Inc.
644 N.E.2d 124 (Indiana Supreme Court, 1994)

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Bluebook (online)
227 B.R. 710, 1998 Bankr. LEXIS 1780, Counsel Stack Legal Research, https://law.counselstack.com/opinion/greenland-homes-inc-v-e-s-marketing-resources-inc-in-re-greenland-insb-1998.